Stock Market Watch

Forex Market Update: Dollar Eases as Stalemate over Debt Ceiling Talks Continues

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The dollar index fell on Monday while safe-haven currencies such as yen and Swiss franc gained as lawmakers in Washington failed to break the logjam over both budget and debt talks, stoking concerns that the U.S. might be heading towards an unprecedented debt default.

Although congressional leaders showed some progress over the weekend talks, ambiguity still persists whether both sides are close enough to agree on a stop-gap deal, which would avert the debt default. Meanwhile, the partial government shutdown has entered its 14th day. Lawmakers need to take a decision on raising the nation’s borrowing limit by Oct. 17.

Christine Lagarde, Chief of International Monetary Fund (IMF) has warned that the global economy could fall back to recession should the U.S. fails in averting the debt-default.

At last check, the dollar index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, fell 0.28% to 80.19.

The WSJ$ Index, which uses slightly boarder indexing criteria, was down 0.32% to 72.57

The yen was up 0.12% against the dollar to trade at yen98.14, at last check.

Still, analysts say that betting too heavily against the dollar might not be a good idea as lawmakers are likely to come up with an eleventh-hour deal.

“With Republicans clearly now on the defensive having given up almost all of their bargaining demands, the prospects for a deal have increased markedly,” said Boris Schlossberg, managing director, FX Strategy, BK Asset Management in New York, according to Reuters.

 








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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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